When calculating the WACC for a firm, one should use the book values of debt and equity.

Name: When calculating the WACC for a firm, one should use the book values of debt and equity.
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Quizplus · Accepted Answer

When calculating the WACC, market values of debt and equity should be used instead of book values. Market values provide a more accurate representation of the true cost of financing for the firm. Book values can be outdated and not reflective of current market conditions.

When Calculating the WACC for a Firm, One Should Use